Banque PSA Finance, Peugeot's captive finance arm in Paris, is planning to sell bonds backed by consumer auto loans originated in the U.K. and Italy, according to a finance department official at the bank. Banque PSA has already securitized collateral originated in France, Spain and Germany.
Other lenders already offer investors exposure to auto borrowers in the U.K. and Italy but this would be a first for Peugeot.
"Our approach is to do single-jurisdiction transactions of about €1 billion," said the official, and noted the pools of consumer loans in the U.K. and Italy are each approaching critical mass for transactions of this size. The precise timing of the deals will depend on auto sale trends in the two markets.
The bank does not intend to combine collateral from different jurisdictions in one transaction, on the grounds that differences in the dynamics of the underlying markets and outstanding loans make such deals very difficult for the issuer to monitor and highly complex for investors to analyze.